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General Atlantic invests $100 mn in Patni Computer

US-based private equity firm General Atlantic Partners LLC has invested $100 million in India's sixth-largest software services exporter, Patni Computer Systems, its first investment in the country, officials said on Thursday.

General Atlantic, one of the world's largest information technology and communications focused private equity firms, has stakes in 60 companies and commitments worth more than $4 billion, one-third of which are outside the United States.

"We have been working on India for the past two years and this is our first investment, a sizeable one," John Wong, General Atlantic general partner, told a news conference.

He declined to reveal the size of General Atlantic's stake in the Indian company, but Patni officials said it was a minority holding.

General Atlantic has backed firms like human resources services provider Exult, email software company Critical Path, online brokerage E*Trade Group and online travel company Priceline.com.

Unlisted Mumbai-based Patni, which posted revenue of Rs 740 crore (Rs 7.4 billion) in 2001, has been in the IT services business for more than two decades, growing at over 40 per cent in the past few years.

More than half its revenue comes from General Electric Co, which earlier invested $15 million in the Indian company, chairman Narendra Patni said.

He said the company planned to go public but could not say when. A domestic listing was likely to precede an international one, he said.

Patni has now privately placed American Depositary Receipts worth Rs 277 crore (Rs 2.77 billion) with General Atlantic, which will hold the rest of its stake in the form of ordinary equity shares.

Two General Atlantic partners will join Patni's board and Patni could tap companies in which General Atlantic has invested for business, he said.

Wong said General Atlantic usually had long-term commitments to its investments, often staying with a company longer after its IPO than before.

LOOKING FOR MORE

General Atlantic is looking at other Indian companies and is soon likely to finalise an investment in unlisted business process outsourcing firm Daksh eServices, Wong said at the sidelines of the conference.

He admitted that General Atlantic had been late in looking at Indian companies, but was bullish on the opportunities still available.

"We try to be independent of markets for our investments," he said. "If you look at the fundamental value that India provides in terms of IT services, they haven't gone away although the economic and political situation has changed."

"There is still a cost arbitrage opportunity," he said. "There are still a large number of people with the right skills and experience who can be hired to scale up, and quality levels are of international standards."

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